Locating suitable resources within a Grid system is a computationally intensive process, with no guarantee of quality and suitability of the discovered resources. An alternative approach is to categorize resources based on the services they provide -- leading to the interaction of peers with common goals to form societies/communities. Organization of resources in different communities is suggested to be useful for efficient resource discovery. We have implemented JXTA prototype to illustrate the concepts of community formation in which Peers offering different services can be grouped together based on different criteria.